#Liquidity101
The hashtag #Liquidity101 refers to a beginner’s guide to understanding liquidity — a foundational concept in both traditional and crypto markets. Whether you're trading on a CEX or a DEX, liquidity affects everything from price stability to order execution.
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💧 What is Liquidity?
Liquidity is the ease with which an asset can be bought or sold without causing a significant change in its price.
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📊 Types of Liquidity
1. Market Liquidity
How easily you can trade an asset (e.g., Bitcoin, ETH).
A highly liquid market = lots of buyers and sellers, tight spreads, quick trades.
2. Asset Liquidity
How easy it is to convert a specific asset into cash or a stablecoin.
E.g., stablecoins like USDT are more liquid than low
